Shafer Office Supplies has four distribution centers located in Atlanta, Cincinnati, Chicago, and Salt Lake City, and

Question:

Shafer Office Supplies has four centers located in Atlanta, Cincinnati, Chicago, and Salt Lake City, and ships to 12 retail stores located in Portland, San Jose, Las Vegas, Tucson, Colorado Springs, Kansas City, St. Paul, Austin, Jackson, Montgomery, Cleveland, and Pittsburgh. The company wants to minimize the transportation cost of shipping one of its higher volume products, boxes of standard copy paper, The per-unit shipping cost from each center to each retail location and the amounts currently in inventory and ordered at each retail location are shown in the table below. Develop and solve an optimization model to minimize the total transportation cost and answer the following questions. Use the sensitivity report to answer as appropriate to answer questions c and d.

Shafer Office Supplies has four distribution centers located in Atlanta,

a. What is the minimum monthly cost of shipping?

b. Which plants will operate at capacity in this solution?

c. Suppose that 500 units of extra supply are available (and that the cost of this extra capacity is a sunk cost). To which plant should this extra supply go, and why?

d. Suppose that the cost of shipping from Atlanta to Birmingham increased to $0.45 per unit. What would happen to the optimal solution?

Distribution
The word "distribution" has several meanings in the financial world, most of them pertaining to the payment of assets from a fund, account, or individual security to an investor or beneficiary. Retirement account distributions are among the most...